Claremont council directs its staff members to make offer for Golden State Water Company's assets

CLAREMONT - City Council members have unanimously directed staff members to make an offer to Golden State Water Co. for its Claremont assets.

City Attorney Sonia R. Carvalho read a closed-session report at the council meeting on Tuesday.

"I am to announce this evening the City Council met to discuss making an offer under the government code to purchase the water system that serves the Claremont area," Carvalho said.

"The city's negotiator has been directed to make an offer for not less than the fair market value as determined by the appraisal that was approved by the City Council."

Carvalho said the council voted unanimously to proceed with making an offer to Golden State Water to purchase its system.

According to the city's website, officials will make an offer in writing and the amount will be made available to the public as soon as it is prepared and provided to the water company.

Mitch Zak, spokesman for Golden State Water, said his company has indicated to both customers and the city the system is not for sale.

"What's important to understand for the customer is the determining factor is not what the city's appraiser deems fair market value but what a jury determines is fair market value in an eminent domain proceeding," Zak said.

"And it's not fair market value by a jury, it's the highest price a willing buyer would pay for the system. That's the determining factor. It's curious the city would essentially obligate residents to hundreds of millions of dollars or a hundred million or who knows of higher water taxes without their approval."

Golden State Water has been fighting with customers in Claremont, Barstow, Apple Valley and other Southern California cities over rate hikes and profits made by the company's parent, San Dimas-based American States Water Co.

The privately owned water company attributed $300,000 in recent profits to rate increases approved on Jan. 1 by the state Public Utilities Commission for regions that include Claremont, Barstow, Wrightwood and Apple Valley.

A proposed settlement between Golden State Water, the state Division of Ratepayer Advocates and the Utility Reform Network, a utility customer advocacy group, in connection with a general rate water increase agreement, would mean Claremont's 11,000 customers and ratepayers in Region 3 would receive a 15.1 percent increase in rates in 2013. There would be an additional 2 percent increase in 2014 and a 1.8 percent increase in 2015.

Claremont officials and a group of residents called Claremonters Against Outrageous Water Rates have been pushing back against the water company about what they say are its high rates and lack of transparency, which the water company disputes.

Councilman Sam Pedroza said Wednesday that council members were limited on what they could say about the decision.

"All I can say is I'm very happy at this point," Pedroza said. "And I think our residents are very pleased as well."

When asked if there was a timeline for when Golden State Water would get an offer from the city, he said he did not know.